55 Percent of Loans in Foreclosure Delinquent Over Two Years
Negative equity in judicial foreclosure states is higher (13.4 percent) than in non-judicial (7.9 percent)
Delinquency for loans in foreclosure is at 966 days on average
Michigan, Missouri, Indiana and Iowa are the most affordable states to own a home; New York and California are the least affordable
JACKSONVILLE, Fla.-- May 5, 2014 -- Today, the Data and Analytics division of Black Knight Financial Services released its latest Mortgage Monitor Report, looking at data as of the end of March 2014. The data showed that, as home prices have risen over the past two years and many distressed loans have worked their way through the system, the percentage of Americans in negative equity positions on their mortgage has declined considerably. Meanwhile, those loans already in the foreclosure process have been aging substantially. According to Kostya Gradushy, Black Knight’s manager of Loan Data and Customer Analytics, both data trends point to a healthier housing market. “Two years of relatively consecutive home price increases and a general decline in the number of distressed loans have contributed to a decreasing number of underwater borrowers,” said Gradushy. “Looking at current combined loan-to-value (CLTV), we see that while four years ago 34 percent of borrowers were in negative equity positions, today that number has dropped to just about 10 percent of active mortgage loans. While negative equity levels have declined for both judicial vs. non-judicial foreclosure states from the peak of the crisis, non-judicial states are now at just under eight percent, as compared to 13.4 percent in their judicial counterparts. Overall, nearly half of all borrowers today are both in positive equity positions and of strong credit quality – credit scores of 700 or above. Four years ago, that category of borrowers represented over a third of active mortgages. “Black Knight has also observed the timelines associated with loans in foreclosure continuing to expand over time, reaching an average of 966 days delinquent for those in the foreclosure process. In fact, 55 percent of all loans in foreclosure are now more than two years delinquent -- an all-time high. The average length of delinquency for completed foreclosures is quite comparable at 955 days. However, as a share of total aged inventory, fewer of these loans are completing the foreclosure process. While it may seem counterintuitive, this is actually also indicative of an improving market. As there are fewer new foreclosure starts, not as many new problem loans, declining delinquencies and improving indicators all around, what’s left are these loans lingering -- for years -- in the foreclosure pipeline.” Black Knight also found home affordability (calculated as a ratio of mortgage payment to income) better now than it was in the years prior to the housing crisis, though the level of affordability varies by state. At the national level, the mortgage-to-income ratio now stands at 22 percent, whereas in 2006, only four states were below this level. As of March, nearly two-thirds of the country fell below this line: Michigan, Missouri, Indiana and Iowa were the most affordable states, whereas New York and California were the least affordable. As was reported in Black Knight’s most recent First Look release, other key results include:
Total U.S. loan delinquency rate:
Month-over-month change in delinquency rate:
Total U.S. foreclosure pre-sale inventory rate:
Month-over-month change in foreclosure pre-sale inventory rate:
States with highest percentage of non-current* loans:
MS, NJ, FL, NY, ME
States with the lowest percentage of non-current* loans:
MT, CO, AK, SD, ND
States with highest percentage of seriously delinquent* loans:
MS, NV, RI, AL, MA
*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state. *Seriously delinquent loans are those past-due 90 days or more. Totals are extrapolated based on Black Knight Financial Services’ loan-level database of mortgage assets.
About the Mortgage Monitor
The Data and Analytics division of Black Knight Financial Services manages the nation's leading repository of loan-level residential mortgage data and performance information on nearly 40 million loans across the spectrum of credit products. The company's research experts carefully analyze this data to produce a summary supplemented by dozens of charts and graphs that reflect trend and point-in-time observations for the monthly Mortgage Monitor Report. To review the full report, visit: http://bkfs.com/LPSCorporateInformation/NewsRoom/Pages/Mortgage-Monitor.aspx
About Black Knight Financial Services, LLC
Black Knight Financial Services, a Fidelity National Financial (NYSE:FNF) company, is the mortgage and finance industries’ leading provider of integrated technology, data and analytics solutions. Comprised of technology offerings from the union of LPS and ServiceLink, Black Knight Financial Services offers leading software systems; data and analytics offerings; and information solutions that facilitate and automate many of the business processes across the mortgage life cycle.
Black Knight Financial Services helps clients in the mortgage industry and beyond achieve their strategic goals, realize greater success and better serve their customers by delivering best-in-class technology, services and insight with a relentless commitment to excellence, innovation, integrity and leadership. For more information on Black Knight Financial Services, please visit www.bkfs.com.